UAE: New Classification for Companies on the Way

UAE: New Classification for Companies on the Way News developments

UAE: New Classification for Companies on the Way

The UAE’s Human Resources and Emiratisation Minister has announced a new classification for companies is on the way.

It will be introduced on 1 June.

It has been introduced to respond to business owners’ demands.

It will protect employee’ rights and encourage innovation and promote the SME sector.

Companies who pledge to comply with the relevant laws and regulations on Emiratisation will be offered incentives.

The classification has been issued by Cabinet Decision No. 18/2022.

Companies will be split into three distinct categories by an interactive automated system which will enable a company’s classification to be changed transparently, in line with the procedures carried out by each company or transactions.

Companies will have to pay the service fees which correspond to the category they are in.

Companies who are in the first category will benefit from significant fee exemptions.

Companies will be able to be promoted to the first category if they meet at least one standard. These include increasing their Emiratisation rate at least three times above the target, cooperating with the Nafis programme to train at least 500 citizens annually or are a venture owned by a young citizen in line with the relevant approved standards.

They also include them being one of the training and employment centres which support implementing the Workforce Planning Policy by promoting cultural diversity or by being active in the targeted sectors and activities determined by the Cabinet based on a recommendation from the Ministry.

Companies which do not meet any of these criteria but have committed to the law and the cultural and demographic diversity promotion policy will be automatically classified in the second category.

All other companies found by the Ministry to have violated Federal Decree-Law No. 33/2021 and its Implementing Regulations (Cabinet Decision No. 1/2022) or the relevant resolutions regulating the labour market, or standards for protecting labour rights, or lack of commitment to promoting cultural and demographic diversity in the labour market will be categorised in the third category.

They may also be categorised in the third category if they commit other violations under Ministerial Decision No. 209/2022.

This includes issuing a final ruling that the facility committed a human trafficking crime, used or recruited workers without obtaining work permits, provided incorrect data, documents or information to the Ministry, violated obligations on workers’ wages, housing and safety standards, resorted to fake Emiratisation practices or committed other serious violations.

Service fees for work permits and transfer fees will not exceed 250 AED for companies in the first category for two years. The fees will be 1,200 for companies in the second category for two years. Companies in the third category will not be able to benefit from any fee rebates and the fees for issuing or renewing work permits will be 3,450 AED for two years.

Activities involving the employment of UAE and GCC citizens are exempt from these fees. Also reported in Alroeya on 24 May 2022. For full story, click here.

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Benjamin Filaferro